Guided through the `Red tape'? Information sharing and foreign direct investment
AbstractWhat drives the observed tendency of new FDI, other things equal, to be attracted to locations where many other foreign investors are located? One explanation in the literature on FDI location is that expected bene ts from agglomeration externalities make rms want to locate in agglomerated regions. Alternatively, potential investors get information about conditions in a host from rms in their own business network that already have experience from that country. We study how Norwegian FDI location choice depends on previous Norwegian presence, using information about institutional quality to separate the impact of information sharing from agglomeration externalities. The impact of previous Norwegian investors is larger in countries with low institutional quality. We interpret this as consistent with the presence of information sharing among Norwegian investors.
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Bibliographic InfoPaper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 3/2013.
Length: 36 pages
Date of creation: 18 Feb 2013
Date of revision:
Contact details of provider:
Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 959 277
Fax: 5595 9100
Web page: http://www.nhh.no/sam/
More information through EDIRC
FDI; location choice; networks; information; agglomeration.;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-09 (All new papers)
- NEP-GEO-2013-03-09 (Economic Geography)
- NEP-NET-2013-03-09 (Network Economics)
- NEP-URE-2013-03-09 (Urban & Real Estate Economics)
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